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How Do Businesses Survive Cut-Throat Competition?

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Sometimes there are more questions than answers. I once went to a meeting with an important partner to negotiate a deal; we discussed the benefits for both parties and agreed on the value proposition. Still, when it came to pricing, objectivity and rationality were placed on hold, because my product was “insurance”. It was to be priced like a commodity with “no cost of sale”.

In his words, “if you do not agree, I will call another insurance company and tell them to beat your price, then call another insurance company to beat the last price…the industry is racing downwards, and we would help them”. The story ended well because we had built a reputable record of service delivery; there’s always a place for relationship management in business. The experience left me with a lot to ponder on. The critical question being, how do businesses survive cut-throat competition? 

I do not have scientific research to back up my recommendations, but they come from a place of practical experience.

Businesses are similar to biological forms. In the words of Charles Darwin, “It is not the strongest of the species that survives, nor the most intelligent but the one most responsive to change”.

At this point, I would like to define cut-throat competition as a type of competition that defies regular market practices. Here pricing is not subject to the laws of demand and supply, cost of production etc., instead it is focused on driving revenue as a means of survival for a large number of players in the industry. 

Until the situation normalizes, it is crucial to treat your business like a portfolio, where you have clear investment objectives with different scenarios and expected returns. This implies that in some scenarios you break even and in others you make calculated losses (this should be very minimal with salient benefits such as gaining or retaining market share), or you make a good profit. If done well, the result should be an upward trajectory for your business.

In treating your business like a portfolio, you need to do the following:

  • Know your Customer and Know your Market: If your service or product is seen as a non-essential by your target market, the bargaining power of the purchaser is amplified, pitching organizations against each other as they fight for a share of the customer’s wallet. In a situation like this, you have to tailor your solutions to what the customer needs. This would involve market research, customer engagement, and hypothesis testing, as well as other data capturing techniques.
  • Know your Cost Price: For people in manufacturing, logistics, trading etc., this could be very easy, but it gets difficult as we move towards the service industry. Some service companies need adequate data and actuarial inputs to determine their cost price. Once this is acquired, you can then make informed decisions about price structure and determine the contribution margin.
  • Create your Niche. Innovate: There is a saying that goes thus, “It is foolish to keep doing the same thing but expect a different result”. You need to build unique capabilities to set your business aside from the pack. No matter how crowded a place is, there are still people that would stand out. I say this often, “There is no saturation in differentiation”. Differentiation gives you an advantage not just in pricing but in customer acquisition, sustainability etc.
  • Drive Efficiency and Build Scale: There are several ways to achieve this. Some include building optimal processes, reviewing your distribution approach, re-designing your operating model, man-power enhancement and optimization, cost management, utilizing technology as an enabler, building partnerships, leveraging on platforms etc.

Also Read: How Tech Is Enhancing Recruitment: An Interview With Sandy Simagwali, Co-Founder Of Graft Africa

  • Product Optimization: This may involve creating varied versions of the same product. It may be a “no-frills” version of your solution or bundling your solution with a variety of complementary solutions. Product optimization should be a product of customer and market interaction.
  • Stakeholder Engagement: The players in the industry can come together to decide fair pricing. This typically works better in a regulated industry. The regulator is empowered to set a minimum price for the industry, which would be more favourable to new entrants and fringe players. The decisions of these regulators often lead to mergers, acquisitions, etc. within the industry.
  • Compete: This involves the use of all capital, emotional, technical, relational, intuitive, network, and physical leverage within ethical and legal confines you may have at your disposal to put you ahead.

By: Oladele Akinsanya

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2020: Paxful, A Global Crypto Giant Sets Top 3 Priorities For Africa

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Paxful Co-Founders, Artur Schabak & Ray Youssef (Source: Paxful)

By almost every metric, Africa has been central to the Paxful story; company shares about their top 3 priorities for Africa

JOHANNESBURG, South Africa- Global peer-to-peer (P2P) Bitcoin marketplace, Paxful, believes that the world has much to learn from Africa about the future of the crypto-economy and that 2020 will be a landmark year for the African crypto and blockchain industry. 

With millions of users globally and Africa being the fastest-growing region, Paxful reported that the company processed almost $1.6 billion (R23 billion) in trade volume globally in 2019; the result of a steady increase of 25%+ trade volume growth year-on-year on the platform since the business’ inception in 2015. Paxful currently hosts over three million wallets, 45% of which are from Africa.

Deepen our relationship with our African users

While the peer-to-peer marketplace has enjoyed tremendous success on the continent, the company is not complacent. Paxful leadership intends to spend a lot more time in Africa over the next few years. The aim is to continue to learn from its customers and provide them with the best possible peer-to-peer finance marketplace. 

With Nigeria, Ghana, South Africa and Kenya already among the leading markets, the company also expects to extend its customer base in many more markets where it is seeing a steady increase in trading volumes on the continent like Zambia and Uganda. African trading volume on the Paxful platform grew by over 57% in 2019 and the company hopes to accelerate trading volumes further this year.

Reflecting on the rapid growth of the blockchain and bitcoin sector, research from the professional networking platform Linkedin shows that blockchain tops the list of most in-demand hard skills for 2020. For this reason, another important consideration for Paxful is engaging talent in Africa. The company believes that Africa can become a leader in bitcoin skills development. Paxful hopes to expand African participation in the company’s Global Peer Programme – an initiative to encourage bitcoin users around the world to educate each other about the opportunities offered by the crypto-economy.

“We are very, very bullish on Africa and believe it is critical to the future of the crypto-economy overall. While many parts of the developed world are fixated on speculative activity in the crypto economy, people in Africa are teaching us about the true use cases of bitcoin and the opportunity it presents for greater financial inclusion of the under-banked. As a company, we want to do what we can to ensure that our platform continues to be a bridge to the global economy for our customers” Says Artur Schaback, Co-Founder and COO of Paxful.

Expanding partnerships

In December 2019, Paxful and Binance, the leading global cryptocurrency exchange by trading volume and users, announced its strategic partnership in which Paxful serves as a fiat-to-cryptocurrency on-ramp for Binance, providing numerous payment methods for purchasing Bitcoin to Binance’s global user base.

Paxful has also partnered with many other strategic players in the crypto economy – including the likes of BitMart, BSpin, AirTM, and CoinLogiq – who offer a variety of complementary services to make it as possible for its users to take advantage of the power of P2P finance. Paxful hopes to work with African partners as well.

“Africa has tremendous potential and partnerships are essential in this pivotal time within the cryptocurrency industry. We are actively looking to join forces with African-born crypto players who share our passion and vision for the global crypto-economy and to join our efforts in bringing bitcoin to the unbanked masses across the continent to fundamentally help alleviate poverty, boost economies and create jobs,” says Ray Youssef, CEO and co-founder of Paxful.

Making education and social good a priority

“With bitcoin’s original mission of financial inclusion in mind, Paxful is committed to reaching as many people as possible to help them better understand the opportunities presented by the crypto-economy. With this in mind, education and social development will always be a priority for Paxful,” adds Youssef.

Also Read: Building Sustainable and Profitable Enterprises: An Interview with David Owumi, Founder of VisionCTRL Africa

Last year, Paxful undertook an education drive focused on Universities. Beginning with Universities in East and Southern Africa, the initiative has reached over 1000 youths. The education workshops provided key, practical insights to the true use cases of Bitcoin, how to avoid falling prey to bad actors in the crypto-space and served to counter the over-emphasis on Bitcoin speculation. This type of education will continue to reach the youth.

In the same year, the company also launched the aforementioned Paxful Peer Program, a platform encouraging users to educate and support each other as they navigate the bitcoin-economy. The Peer Program was trialed in South Africa and has been extended to include many other markets on the continent and Asia.  

To support grassroots education, Paxful will continue to invest in its #BuiltWithBitcoin initiative which has demonstrated how the cryptocurrency community can contribute to social good. Established in 2017, the initiative had raised over R3 million for charities across Africa and the Middle East by 2019.

In January 2020, the company announced that they will be building a third school in its 100-school initiative to bring quality education centers to emerging countries throughout Africa. The third school, which will come fully equipped with a state-of-the-art water well system, will be built in Machakos County, Kenya for children ages 3-6 years old and will kick off with over R400,000 donation from Paxful. The first 2 schools were built in Rwanda.

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Anzisha Prize Announces 2020 Applications, Celebrates A Decade Of Empowering African Entrepreneurs

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Anzisha Prize 2019 Fellows celebrate their victories (Source: Anzisha Prize)

Every year, the prize celebrates 20 African entrepreneurs, aged 22 years and younger, each of whom have a chance to win a shared prize of US$100,000

JOHANNESBURG, South Africa, February 17, 2020 – Today, the Anzisha Prize–Africa’s premier award and fellowship for Africa’s youngest entrepreneurs – is excited to announce that the 2020 call for applications is now open.  Every year, the prize celebrates 20 African entrepreneurs, aged 22 years and younger, each of whom have a chance to win a shared prize of US$100,000. The grand prize winner receives US$25,000, the 1st runner-up US$15,000, and 2nd runner-up US$12,500. Every finalist receives US$2,500.

In addition to the cash prize, selected entrepreneurs will join 120 previous winners and become Anzisha Fellows, receiving business consulting support and coaching services by a team of industry experts. They also gain access to the Young Entrepreneurs Fund – a catalytic matching fund designed to strengthen the credibility of very young entrepreneurs through investment.

“It has been an exciting 10-year journey with some of the continent’s brightest and youngest entrepreneurs. With the help of key partners and those who share in our vision, we’ve been able to support and celebrate very young entrepreneurs who represent the diversity of the African continent; entrepreneurs who tackle youth unemployment with vigour and courage beyond their years,” says, Melissa Mbazo-Ekpenyong, Deputy Director of the Anzisha Prize.

To celebrate the decennial, the Anzisha Prize has planned five regional events across the continent, including South Africa, Morocco, Nigeria, Senegal, and Kenya. The events end in October with the Anzisha Prize Forum in Nairobi, Kenya where the 2020 winners will be announced. Each event is designed to catalyze conversations around youth entrepreneurship and to gather key stakeholders within the entrepreneurship landscape to collaborate with and support these young entrepreneurs.

2019 Anzisha Prize Fellows celebrate their victories(Source: Anzisha Prize) 

“The Anzisha Prize has grown to become a holistic and comprehensive prize program that celebrates, nurtures, and advocates on behalf of Africa’s young job creators,” says Daniel Hailu, Regional Head Eastern and Southern Africa Programs, Mastercard Foundation. “Ensuring young entrepreneurs have a clear pathway to learn and succeed is a core component of the Mastercard Foundation’s Young Africa Works strategy, and we encourage entrepreneurs, especially young women to apply.”

Also Read: Building Sustainable and Profitable Enterprises: An Interview with David Owumi, Founder of VisionCTRL Africa

Young African entrepreneurs between the ages of 15-22 years old, who are running job generative businesses, are encouraged to apply before 31 March 2020. Past winners of the prize include 2019 grand prize winner, education entrepreneur, Yannick Kimanuka from Democratic Republic Congo (DRC). Yannick grew up in the war-torn North Kivu eastern Province of DRC where she saw the effect that conflict had on schools in her community and vowed to empower children by increasing access to quality education. By the age of 20, Yannick founded KIM’s School Complex – a nursery and primary school which aims to improve the education of young children in her community.

As the program continues to influence and inspire young people to seek entrepreneurship as a career path, the road ahead is a promising one. To encapsulate the last 10 years of the program, the Anzisha Prize has chosen the word ‘Sankofa’ in the Ghanaian Twi language, which means “We have the capacity to revisit the past and extract knowledge and wisdom that we need to remake the future“.

Entrepreneurs are advised to download the application guide or apply for the prize at anzishaprize.org/apply.

For more information on the Anzisha Prize, to apply, and to nominate an entrepreneur, please visit the Anzisha Prize website.

Anzisha Prize

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Financial Inclusion: Ecobank Group And Alipay Partner On cross-border remittance

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Alipay users to benefit from Ecobank’s cross-border remittance solution

LOME, Togo, February 12, 2020 – The leading pan-African bank, Ecobank has signed a cross-border remittance agreement with Alipay, the world’s leading payment and lifestyle platform, that aims to bring more inclusive financial services by providing a fast, safe, affordable and convenient way for workers to transfer money back home.

The partnership will facilitate instant transfers from Rapid transfer, Ecobank’s remittance solution, to users of Alipay, which serves more than 1.2 billion people globally together with its local e-wallet partners. This provides an additional channel option which will increase options available to users, help lower transaction costs and enhance the quality of service in the market.

Also Read: How Tech Is Enhancing Recruitment: An Interview With Sandy Simagwali, Co-Founder Of Graft Africa

Nana ABBAN, Group Consumer Banking Head said: “Our panafrican cross-border remittance solution, Rapidtransfer, has over the years been delivering transparent, convenient, and affordable services to the African diaspora and their African-based dependants. So, it is a natural extension for us to use it to deliver the same advantages to migrant workers across Africa. Through our partnership with Alipay we are further leveraging the scale and capacity of our unified payments ecosystem on the global stage.”

“We are excited to partner with Ecobank and use our technology to bring fast, affordable, and convenient remittance services to more users globally, especially workers who are living far from home,” said Ma ZHIGUO, Alipay’s head of the global remittances business. “We are committed to working with partners such as Ecobank, using innovative technologies to help global consumers gain access to inclusive financial services, creating greater value for society and bringing equal opportunities to the world.”

The solution will be rolled out across our entire footprint, subject to required local approvals.

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